According to ABC Radio this morning, Kevin Rudd wants 2020 Summit participants to come up with at least one idea that won’t cost anything. Good luck there, Prime Minister.
It might be a case of do as I say, not do as I do, because Rudd’s own big summit idea, unveiled to Gerard Henderson and friends last night, is a one-stop shop for pre-school childcare and health services — “Parent and Child Centres” for every child below the age of five.
The Prime Minister’s proposal would undoubtedly have significant benefits, and not just for working parents. There’s a consensus that devoting a lot of resources to kids under five yields massive benefits in terms of long-run social costs. But the proposal has been universally reported as “uncosted”, and no one appears to have made a stab at working out how much this would require. So we at Crikey, who have done a bit of costing of wild proposals in our time, have had a crack.
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According to the ABS, there’s about 1.5 million children in all forms of childcare, but less than half of those are in formal childcare. There are currently over 5000 childcare centres in Australia, which would presumably form the basis of Rudd’s Parent and Child Centres. Given the Treasury’s Inter-generational Report estimates that the proportion of children under four won’t change a great deal between now and 2020, let’s assume the Centres will be catering to the same population size. And let’s assume that take-up rates for the Centres reflect current usage – that is, only about one-third of all the kids in child care will actually use the Centres.
Let’s also assume there are minimal land, construction and fitout costs for the centres. If they’re based on existing childcare centres, or co-located with Australia’s 9000-odd schools, then that isn’t too unrealistic an assumption.
That done, the cost of providing full-time nurses – wages, super, admin costs – to shuttle between a number of Centres to provide maternal health checks (based on the number of births every year) would be about $23m a year. Providing a full-time trained pre-school teacher at every childcare centre would be $440m pa. Part-time playgroup coordinators would be another $100m-odd. Centre managers would be $500m. Providing a basic maintenance budget for the upkeep of the Centres would be another $275m. And the cost of providing sufficient childcare workers at the best-practice child-carer ratio of 1:3 would be in the order of $10b per annum.
That brings us to a grand and conservatively-costed total of $11.9b p.a. Not including medical equipment, or furniture, or overhead like utilities.
No wonder Rudd immediately flagged that this could only be achieved – as childcare and health pretty much is now – in partnership with the States, Territories and local government and the private sector, as well as indicating services would be provided on a “low cost” basis, except for long-day care, which would continue to be subsidised. So the real difficulty will lie in trying to move existing services into a new “one-stop shop” style framework.
The big problem with that will be getting health and education bureaucracies in each state and territory to coordinate with each other. And the additional staff required by the childcare sector aren’t going to be easy to find. By 2020 the current shortage of employable people is likely to have worsened, not improved. Perhaps someone at the summit can concentrate on trying to find us some more people.